Globe Street reported in late July that cap rates in Q2-2023 stabilized for prime multifamily properties. The report was provided by CBRE. According to the report, cap rates increased between 20 and 40 bps for the last three quarters (Q3-2022, Q4-2022 and Q1-2023). For Q2-2023, the average prime multifamily going-in cap rate increase was 1 bps, or 4.73%. One. Wow. When the brakes get slammed, they get slammed hard. The spread between going in and exit cap rates is a slim 21 bps (exit @ 4.94%). The report also predicted that average annual rent growth for the next three years will be 2.90%. That’s quite a departure here along the Wasatch Front in Utah where 2021 and 2022 each saw annual rent growth at or above 10.00%. We’re coming back down to earth.

 

 

Svikhart & Associates, a Salt Lake City-based real estate services company, focuses on asset management, brokerage listings and sales, and all aspects of a multifamily investment. Specific diligence regards property operations and strategies to maximize asset performance and value. Additionally, the firm assists owners regarding economic, financial and market factors that impact returns on investment. The firm targets ‘Mid-Tier’ assets which it defines generally as 10-to-60-unit properties.

 

Please find us at svikhart.com or contact us at 801-550-5684 to learn about the real estate services the firm provides. To subscribe to the firm’s newsletter addressing events of the day please follow this link Newsletters.